Fixed-term contracts generally do not have a termination clause and simply expire at the end of the term or on the date specified in the contract (unless terminated early by one of the parties – see answers to questions 5 and 6 below). Employees are now entitled to one day off without pay per week to look for a new job where the employer terminates the employment contract. However, the new Labour Code expressly allows dismissal for reasons other than those related to the performance or conduct of an employee. The new Labour Code is now moving, in a way, towards the recognition of dismissals as grounds for dismissal – dismissal being allowed if the employer is insolvent or insolvent, suffers from economic or exceptional reasons or is closed. However, this is not enough to make a dismissal “fair” because the number within a given role must be reduced. As the name suggests, a fixed-term contract is a type of employment contract valid for a short period. It begins and ends on the specified dates, unless it is extended by the employer. An employer can terminate an employment contract without notice and withdraw the employee`s end-of-service allowance if this is the case: If your company plans to enter global markets in the short term, contact us today. We`ll help you understand the benefits and risks of each job option so you can determine the best overall hiring strategy for your business. Contact our team of experts today to find out how our global PEO solution can help you achieve your global growth goals in more than 185 countries. The contract is terminated under the following conditions: All UAE employees will be migrated to fixed-term contracts within one year of its entry into force. The new Labour Code contains useful provisions that allow employers to terminate the employment relationship before the expiry of the fixed-term period for a “legitimate reason”.
(According to the current Labour Code and other regulations, fixed-term contracts can only be terminated before their expiry for a summary reason for dismissal under article 120 (e.B. causing material damage or breach of trust), otherwise a penalty or compensation must be paid (see above)). Compensation in the event of unlawful termination remains limited to three months` total salary, in addition to all contractual and legal claims. The new Labour Code specifies that remuneration is determined according to the seniority of an employee, the type of work performed and the amount of damage suffered by the employee. Therefore, if an employee has only been hired for a short period of time and finds a new job relatively quickly, the compensation for early termination of a fixed-term contract should likely be limited by the courts to one month plus the corresponding notice period. The court`s tendency to grant the full three months can be challenged in many cases, which can help negotiate cheaper settlements with departing workers. Despite the benefits, companies need to consider some challenges before pursuing this employee hiring strategy. First of all, a short-term contract cannot be terminated or shortened before its expiry date.
In this case, the company is responsible for the payment of the employee`s remuneration for the period specified in its contract. To avoid this obstacle, it is recommended to include an early termination clause in the initial contract. In accordance with Article 120 of the UAE Labour Code, the employer may dismiss an employee under a fixed-term contract without notice in the following circumstances: This change may be a matter of concern for commission employees and employers who reward commission income within the EOSG out of habit and practice. The change may not provide adequate future security for employees who are employed with a low base salary, but the ability to earn a high percentage of their income through commissions and other sales incentives. These employees can now be asked to forego the benefit of a more valuable EOSG benefit in the event of termination of employment. The principle corresponds in a way to the use of a disproportionate percentage of allowances to reduce the right to eosg, which is considered unfair. In our view, it should be possible to maintain some form of average surtax to reflect commissions and sales incentives if it is fairer and avoid punishing potentially lower-paid sales reps, as the law has always allowed an employer to be more generous in benefits than the legal minimum. Employers who maintain a more generous advantage may have the advantage of attracting and retaining the best sellers in the market. Some employers will want to retain the value of this benefit for employees, and others may see it as an economy or confirmation of current policies. Again, however, we expect this change to simplify the calculation of regular payments in a fund-based system in the future, which will facilitate administration and avoid disputes.
For “piecework”, we find that a variable average increment is always mandatory. A fixed-term contract is a fixed-term contract and is usually linked to the duration of the UAE residency visa (i.e. two or three years, depending on the employer`s location). It terminates automatically at the end of the term, unless it is terminated earlier by one of the parties or renewed by both parties. According to Article 122 of the UAE Labour Code, arbitrary dismissal of an employee occurs when an employee is dismissed for reasons unrelated to the performance of the work or when the employee files a valid complaint against an employer that led him to maliciously dismiss him. Under the current Labour Code, the right to annual leave passes to an employee over time and technically cannot expire. Many employers implement “use it or lose it” provisions in contract documents or policies with limited transmission rights, but the status of these provisions has always been questionable. A fixed-term contract may not exceed two years and must indicate the period of notice from at least one month to a maximum of three months. A fixed-term contract can be terminated on the following basis: A contract of indefinite duration is of indefinite duration and can be terminated for various reasons under the United Arab Emirates Labour Code (see the answer to questions 13 and 14 below). .